Discharge: Frustration Flashcards
Taylor v Cadwell
Defines as when the contract becomes impossible to perform at fault of neither party, the contract ends
Force majeure clauses
Express terms in a contract to exclude liability/provide what will happen in unforeseeable/extraordinary event
Frustrating events
Impossible (subject matter destroyed)
Impossible (subject matter unavailable)
Illegality
Radical changes in circumstances
Taylor v Caldwell (FE)
Frustration due to destruction of subject matter
Jackson v Union Marine
Frustration due to subject matter becoming unavailable
Noblee Thorl
Must become impossible, not just difficult/expensive
Condor v Barron Knights
Frustration due to unavailability of a person
Denny, Moff and Dickerson v James Fraser
Law changes so performing contract is not legal
Krell v Henry
Circumstances drastically change after contract is made so contract becomes pointless
Herne Bay v Hutton
Not frustrated for change of circum if does not make contract pointless
Davis Contractors v Fareham UDC
If just inconvenient/slightly different circumstances, this does not mean it’s impossible
Limits on frustration
Foreseeable events
Self induced frustration
Amalgamated Investment Property v John Walker
If the frustrating event could have been foreseen by the party, they cannot argue this frustrated their contract
The super servant two
If frustrating event was due to voluntary action/choice of one of the parties, the contract will not be frustrated as if one party is in control it is their ‘fault’
Effect of frustration on contract
Automatically ends a contract from the point of the frustrating event, parties have no choice in this
S1(2) Law Reform (Frustrated Contracts) Act 1943
- Money paid at the time/before frustrating event is recoverable (minus ‘just expenses’)
- any money still to be paid ceases to be payable
Gamerco
Some money paid/payable before FE may be kept by other party for expenses (at court’s discretion and capped at amount paid/payable before FE)
S1(3) Law Reform (Frustrated Contracts) Act 1943
Where no pre-payment made/payable before FE but party partly performed, some money may be awarded for worth of performance/repay expenses
